DCIT, CHENNAI V. M/s. Voora Property Developers Pvt.Ltd., CHENNAI

MA 131/CHNY/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0038 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-11-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-11-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 28-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Transfer pricing
• Section: 32; 6

Judgement Text

आयकर अपीलीय अिधकरण, ’डी’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI ी वी. दुगा राव, माननीय ाियक सद एवं ी मंजूनाथा.जी, माननीय लेखा सद के सम BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA.G, HON’BLE ACCOUNTANT MEMBER Miscellaneous Application No.131/Chny/2023 (in IT (TP) A No.68/Chny/2019) िनधा रण वष /Assessment Year: 2015-16 The Dy. Commissioner- of Income Tax, Company Circle-3(1), Chennai. v. M/s.Voora Property – Developers Pvt. Ltd., No.28, Voora JK Tower, 4 th Floor, Bazullah Road, T. Nagar, Chennai-600 017. [PAN: AAACV 5747 J ] (अपीलाथ /Appellant) ( यथ /Respondent) Department by : Shri P. Sajit Kumar, JCIT Assessee by : Shri N. Arjunraj, CA सुनवाई क तारीख/Date of Hearing : 10.11.2023 घोषणा क तारीख /Date of Pronouncement : 10.11.2023 आदेश / O R D E R PER MANJUNATHA.G, AM: The Revenue has filed present Miscellaneous Application u/s.254(2) of the Income Tax Act, 1961, against the order of the Tribunal in IT (TP) A No.68/Chny/2019 dated 22.02.2023, and pertains to assessment year 2015-16. MA No.131/Chny/2023 (in IT (TP) A No.68/Chny/2019) :: 2 :: 2. The Revenue has narrated the facts of its case and mistakes stated to be apparent on record from the order of the Tribunal dated 22.02.2023 and relevant contents of Miscellaneous Application filed by the Revenue for the AY 2015-16 in IT (TP) A No.68/Chny/2019, are reproduced as under: 1. The above appeal was allowed by the Handle Income Tax Appellate Tribunal in favour of assessee by its order dated 22,02,2023, By the said order the Assessing officer was directed to delete the downward adjustment made towards 'specified domestic transactions' u/s.92BA(i) of the Income Tax Act, 1961. 2. The assessee company filed ITR for the A.Y. 2015-16 on 30.11.2011 admitting income of Rs.2,00,03,860/-. The case was selected for scrutiny under CASS. Subsequently, considering the issues involved, the case was referred to Transfer Pricing Officer 3(2), Chennai for determination of Arm's Length Price on 14.09.2017 based on the approval of the PCIT-3, Chennai. The DCIT, TPO 3(2), Chennai suggested for a downward adjustment to the extent of Rs.39,60,860/-. Based on that, the assessment was completed on 27.02.2019 with addition of Rs.39,60,860/- towards transfer pricing adjustment. Aggrieved, assessee filed appeal before CIT(A). 3. The Ld. CIT(A) dismissed the appeal of assessee. Aggrieved by the order of the CIT (A), the assessee filed appeal before Hon'ble ITAT. 4. The Hon'ble ITAT relied upon the decision of Hon'ble Supreme Court in the case of General Finance Co. Vs. ACIT and also the decision of ITAT KoLkata Bench in the case of M/s Rahee Jhajharia E to E(JV) Vs. ACIT and stated that adjustment made by the TPO towards 'specified domestic transactions' u/s.92BA(i) of the Act cannot be sustained and allowed the appeal of assessee. The Hon'ble ITAT directed the AO to delete downward adjustment made towards 'specified domestic transactions' u/s.92BA(i) of the Act. 5. It is respectfully submitted that as per the said appellate order the Hon'ble ITAT taken reference of the Hon'ble Supreme Court in the case of General Finance Co. Vs. ACIT (supra) had considered that the principle underlying Section 6 of the General Clauses Act, as saving the right to initiate proceedings for liabilities incurred during the currency of the Act, will not apply to omission of a provision in an Act, but only to repeal, omission being different from repeal. 6. However, the following decisions, (1) M/s. Shree Bhagwati Steel Rotting Mills vs. C.J.T. Excise & Others - 2015(326) ELT 209(S.C.), (2) M/s. Fibre Boards 62 Taxmann.com 133 (S.C.) interpret the matter in favour of the Revenue's stand that omission of a provision shall have to be interpreted as per sec.6 and sec.6A of GCA 1897 and read in togetherness. For proceedings which stem from the omitted provision, or part thereof, including consequential proceedings, it shall not mean an obliteration from the very beginning; it will have the effect as if the omitted part is in full force before such omission of the provision, or part thereof. The sum and substance of the ratio laid down in above decisions is that if a provision is repealed then, actions taken earlier will be protected by clause 6 & 6A of the General Clauses Act, 1897. Further, In the case of M/s. Shree Bhagwati Steel Rolling Mills vs. CIT Excise & Others - 2015 (326) ELT 209 (S.C.J, the Hon'ble Supreme Court in its judgment has observed that an omission is also one of the modes to repeal the provision. In other words, there is no distinction between "repeal" or "omission" and both are to be read as synonymous to each other and if omission is also to be treated as repealed then action taken under the provision when it was in subsistence would continue even after it is repealed. MA No.131/Chny/2023 (in IT (TP) A No.68/Chny/2019) :: 3 :: 7. Also in the case of M/s. SunEdison Solar Power India Pvt. Ltd. in ITA No.1520/Chny/2018, 2164/Chny/2019, 570/Chny/2020 and ITA No.427/Chny/2020 dated 12/04/2023 the case was decided by same bench of Hon'ble ITAT Chennai, contrary stand was taken by Hon'ble ITAT on same issue. Relevant portion (para 14) of the said order of Hon'ble ITAT is as mentioned below: "In so far as the observations of the Assessing Officer and the Id, CIT(A) are concerned, we find that neither the Assessing Officer nor the Id, CIT(A) had any dispute regarding manner in which quantum of goodwill was arrived at. In fact, both the authorities have accepted the valuation of net asset acquired by the assesses company and the valuation for arriving at the consideration to be paid to the shareholders of the demerged company. It is also a fact that no goodwill was appeared in the books of Demerged Company before appointing date. The fact that the depreciation on goodwill was specifically omitted by amending section 32 by the Finance Act, 2021 w.e.f. 01.04.2021 also demonstrate that depreciation on goodwill was allowable before the amendment." 8. In this case when the additions made by the TPO u/s. 92BA(i) of the Act, said provision very much existed in the statute and thus, subsequent omission of said provision does not invalidate addition made. 9. Considering the above it is prayed that order u/s.254(2) may be passed at the earliest to rectify the mistake apparent in the order of ITAT dated 22.02.2023. 3. We have heard both parties in light of Miscellaneous Application filed by the Revenue u/s.254(2) of the Act, against the order of the Tribunal in IT (P) A No.68/Chny/2019 dated 22.02.2023, and we find that, the Revenue has failed to make out a case of prima facie mistake apparent on record from the order of the Tribunal, but what is sought through present Miscellaneous Application is to review the decision rendered by the Tribunal in the given facts and circumstances of the case. Further, it is a well settled principle of law by the decision of the Hon’ble Supreme Court in the case of CIT (IT-4) v. M/s.Reliance Telecom Ltd., in Civil Appeal No.7110 of 2021 dated 03.12.2021, where, the Hon’ble Supreme Court clearly laid down the ratio in respect of powers of the Tribunal u/s.254(2) of the Act, and held that said powers is only to correct and/or to rectify the mistake apparent on record and not beyond that. The Court further held that even if the observations on merits are erroneous, in that case, the remedy available MA No.131/Chny/2023 (in IT (TP) A No.68/Chny/2019) :: 4 :: to the assessee/respondent was to prefer an appeal before the Hon’ble High Court. Since, the Revenue failed to make out a case of prima facie mistake apparent on record from the order of the Tribunal, in our considered view, Miscellaneous Application filed by the Revenue u/s.254(2) of the Act, deserves to be dismissed and thus, we dismiss the Miscellaneous Application filed by the Revenue. 4. In the result, the Miscellaneous Application filed by the Revenue is dismissed. Order pronounced on the 10 th day of November, 2023, in Chennai. Sd/- (वी. दुगा राव) (V. DURGA RAO) याियक सद य/JUDICIAL MEMBER Sd/- (मंजूनाथा.जी) (MANJUNATHA.G) लेखा सद य/ACCOUNTANT MEMBER चे ई/Chennai, दनांक/Dated: 10 th November, 2023. TLN आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 3. आयकर आयु /CIT 5. गाड फाईल/GF 2. यथ /Respondent 4. िवभागीय ितिनिध/DR